Consumer advocates are urging Ajit Pai, chairman of the Federal Communications Commission, to uphold rules restricting companies from inundating people with cellphone calls to collect money owed to or guaranteed by the government, including federal student loans, mortgages and taxes.
Eighteen organizations, led by the National Consumer Law Center, will file a petition with the FCC on Wednesday opposing student loan companies’ request for a revision of rules the agency approved in August. Those rules tightened a provision that was slipped into a 2015 congressional budget deal, amending a law meant to protect people from being harassed or bombarded with text messages and calls that could run up their cellphone bills.
The commission limited the number of calls debt collectors can make to wireless phones to three a month and barred them from contacting a borrower’s family or friends. It also said companies must notify people of their right to request that all calls cease upon request.
“It is pretty stressful owing money, and calls from debt collectors nagging you to pay is also very stressful, and when the calls are not just made to you but to your relatives, it’s embarrassing,” said Margot Saunders, an attorney with the National Consumer Law Center.
Companies that collect student debt payments on behalf of the Education Department, including American Education Services (AES), Great Lakes, Nelnet and Navient, filed a petition in December asking the FCC to reverse course. They argue that the three-call limit is unreasonable and that the FCC does not have the authority to prohibit calls to family and friends.
Furthermore, the servicers say the FCC’s interpretation of its rulemaking authority under the Telephone Consumer Protection Act, a law that bans the use of autodialers to call and text people on their cellphones without permission, is “impermissibly broad.” That argument might strike a chord with Pai, who as a commissioner dissented against the rules under the same pretense.
Still, it is unclear whether the chairman, who was not made available to comment, will side with the loan servicers. Pai has routinely decried robo-calls as a nuisance, and in the same dissenting opinion he said federal contractors should be subject to the Telephone Consumer Protection Act.
“Granting the petition is the right thing to do,” said Winfield P. Crigler, executive director of the Student Loan Servicing Alliance, which wants the restrictions repealed. “Don’t be fooled by the empty rhetoric — these calls are only about helping borrowers avoid delinquency and default.”
Crigler said that sometimes it takes more than a few calls to reach a borrower and that it’s critical for loan servicers to have the right to keep trying to help borrowers enroll in the repayment plan that best suits their needs. The FCC, she stressed, “undermined Congress’s clear intent to help student loan borrowers” but added that the new chairman can fix that.
In their petition, the servicers insist that people they frequently contact stand a better chance of remaining current on student loan payments. Nelnet said that calling up to 10 times a month leads to 42 percent more live contacts than calling three times a month and that borrowers the company autodials resolve their delinquency at higher rates.
Saunders, of the law center, balked at those results in Wednesday’s petition. She wrote that Nelnet’s 233 percent increase in calls yields only a 42 percent increase in live contact, evidence that “repeated robo-calls produce rapidly diminishing returns that do not justify the harassment.”
Nelnet, AES and Navient are among a handful of companies paid millions of dollars by the federal government to manage payments, answer questions and help people avoid defaulting on their student loans. Their pay is aligned with their performance, so the more people they keep current, the more money they make. But advocacy groups say servicers are exceedingly aggressive in trying to reach borrowers.
Navient, for instance, is facing several separate lawsuits from people who say the company called them dozens of times a week. A Georgia man claims he received roughly 3,500 calls from the company over two years, while a man in Florida is suing the company for placing 150 automated calls to his cellphone.
Patricia Nash Christel, a spokeswoman for Navient, said the company could not comment on pending legal matters but disagrees with the claims.
“We are committed to honoring our customers’ communication preferences and helping them to learn about their student loan repayment options,” she said.
In 2016 alone, the Federal Trade Commission received more than 3.4 million complaints about robo-calls. Saunders said the volume of complaints could grow exponentially if the FCC dials back its restrictions.
“It’s not good public policy to allow debt collectors to harass people into paying a debt,” Saunders said. “You want to notify them so you can inform them of their rights, but one phone call and one voice mail will do that.”
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